The wheel. The printing press. The internet. Every now and then, an innovation so transformative comes along that it revolutionizes everything we know, changing the way the world operates. We’ve heard about these groundbreaking evolutions, but what does it look like to actually navigate one?
The time to find out is now.
Artificial intelligence has made its debut, and it’s setting the course to transform how businesses operate — and automotive retail is no exception. AI is opening the door to automate tasks, predict market trends, and provide 24/7 support like we’ve never seen before — all while enabling your team to focus on the customer-facing tasks that matter most. But AI won’t stop there.
AJ McGowan, vice president of research and development at Reynolds, recently gave a keynote address at an AI summit in Santa Clara, CA. There, McGowan traced Reynolds’ entire AI journey to the present day and looked ahead to where the technology is going next.
Let’s dive into the key takeaways from the summit.
The First Wave: Generative AI
The first major wave was generative AI. Mainstream adoption of generative AI started in late 2022 with ChatGPT and was followed by various other models, like Gemini, Copilot, and Claude. Think of generative AI as an intern at your dealership: You give them a specific task, and they’ll give you a specific output. This can include taking calls, drafting content, summarizing documents, writing email responses, and more.
For instance, let’s look at your
merchandising process. With generative AI, the tool can write the vehicle descriptions from the VIN, clean the photo backgrounds, and place overlays. By automating these simple, repetitive tasks with AI, you free up your team and get the car on the lot faster.
But like an intern, generative AI is limited to the assignment you give it. While generative tools promise efficiency throughout your processes, that efficiency is task-specific and relies on your employees to act on the output. These limitations set the stage for the next phase of evolution: agentic AI.
The Second Wave: Agentic AI
Where generative AI produces an output, agentic AI acts on it. In other words, if generative AI is the intern, then agentic AI is the employee. Agentic models can autonomously manage complex workflows, independently make decisions, and take action to achieve multi-step goals with minimal human supervision.
In practice, this means AI can:
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Recognize a new lead.
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Evaluate the customer’s needs.
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Review available inventory.
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Initiate outreach.
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Update the CRM accordingly.
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Schedule follow-ups or test drives.
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Adapt its next actions based on the customer’s engagement.
Rather than waiting for your employee to trigger each step, agentic AI coordinates the entire workflow and moves the entire customer journey forward. That way, your team can focus on the most important task: closing the deal.
And this type of AI isn’t a switch; it’s a spectrum. Some agentic AI agents will provide recommendations, then wait for your approval. Some take action with guardrails. Some run the complete workflow from endpoint to endpoint. Its action is dependent on you and your dealership’s goals, so it can scale from being a simple chatbot to an autonomous teammate, ready to assist when needed.
This wave of AI goes beyond being a smarter model — it’s an intentional shift. Now, agentic
AI is part of your team and can alleviate the time-consuming task of outreach, while preventing wasted time on leads that will likely never convert.
The Upcoming Wave
The first two waves of AI are feats on their own, but the next phase is going far beyond its predecessors. At the summit, McGowan dubbed the upcoming wave “cognitive software.”
If generative and agentic AI are the intern and employee, respectively, then cognitive software is the veteran employee. Most seasoned dealers have come across the thirty-year veteran who knows every customer’s kids’ names, or who can tell from a service ticket who’s about to trade — maybe even the one who walks past a deal at the desks and says one sentence that seals it. This veteran is crucial to operations, but when he retires, his knowledge leaves with him.
Cognitive software will close that gap by enabling knowledge to accumulate in the system, giving every employee across your dealership access to insights that once took years to develop. This upcoming wave is essentially a platform that senses the business as it runs, rather than waiting to be asked: It’s a software that remembers. It’s also a software that’s signal-based. Instead of traditional event-based systems, cognitive software continuously senses the state of every record and where it is in the customer journey.
Cognitive software is the future — a future where your system can compound knowledge and become more valuable with every interaction. And while the AI landscape isn’t quite there yet, it’s quickly approaching — so
the right technology partner matters. The right dealership partner not only knows how to ride the waves of change with AI but is also trusted to know when the tide is turning. Reynolds understands this environment because they’re helping shape it by developing the latest AI capabilities alongside — and even ahead of — the industry.
As AI becomes vital to dealership operations and staying ahead of the competition, the advantage will go to the top-performing dealers who can distinguish between what is possible today and what will matter tomorrow.
To see AJ McGowan’s full keynote address and learn how to gain a competitive edge with AI,
watch here.
